BUSINESS TRENDSBrace for 10% slide in 2008 capex
Semiconductor equipment spending will slip 9.9% in 2008 in large part due to measures taken to absorb memory oversupplies, though the second half of the year should pick up strength and set the stage for a return to growth in 2009, according to Gartner.
After enjoying growth in the 20% range in 2006, spending for most equipment categories slowed to single digits in 2007, increasing about 6.8% to $44.8B, with wafer fab equipment (WFE) investments up a little more and flattish investments in final manufacturing, though there are signs of better spending from semiconductor assembly and test services (SATS) players.
A “long overdue capital spending correction” among DRAM manufacturers is the main culprit behind the equipment market contraction in 2008. (Source: Gartner)
In 2008, Gartner forecasts all major segments of the equipment market to see lower spending, particularly areas that are heavily exposed to the DRAM sector (i.e., wet processing, oxidation/diffusion furnaces, and Al sputtering tools), execs said at the Industry Strategy Symposium in January. Also weighing down expectations for a more cautious spending mood are projections of a slow year from foundries and rising concerns about a US recession.
Gartner sees a weak first half as DRAM companies slow down investments to get supply/demand balance under control, more than offsetting increased spending for NAND flash. But foundries pushing to the next technology node should lead a rebound in 2H08, along with logic investments.
Toshiba has extended its two-year collaboration with IBM on 32nm and below node technologies to now include 32nm bulk CMOS process technology, joining five other participants in the work (AMD, Chartered, Freescale, Infineon, and Samsung). The company plans to accelerate its own development of integration technology for the 32nm process at its Advanced Microelectronics Center in Yokohama, Japan.
Lam Research has agreed to acquire SEZ Group for $568M in cash, claiming SEZ’s wafer cleaning and decontamination (based on its spin-process single-wafer cleaning tools) is a key process adjacent to Lam’s bullseye market of etch. For Lam, the deal represents about 45% of its total cash balance. SEZ has about 40% overall market share, and 60% in the single-wafer market, dubbed its fastest growing segment.
IBM has agreed to license Infineon’s 130nm embedded flash technologies, expanding its custom foundry services capabilities and giving Infineon an extra manufacturing source for the process, which has been in volume production since early 2006 in advanced microcontroller chips. Integration and qualification has begun at IBM’s 200mm fab in Burlington, VT, with a preliminary design kit planned for 2H08.
ASML and Carl Zeiss SMT say they have agreed to cross-license patents with Canon in their respective fields of semiconductor lithography and optical components, involving no technology transfers, in order to “compete more freely” in areas of technology and implementation “rather than on IP rights.”
Qimonda is taking steps to reduce its world wide 200mm manufacturing capacities, to increase its 300mm production mix to 90%. The plan involves discontinuing 200mm contract manufacturing done by Infineon in Dresden, Germany, by March, and discontinuing 200mm capacity at partners Winbond and SMIC by year’s end. The company also has sold $289M worth of 200mm chip equipment from its Richmond, VA operations to Australian firm Macquarie Electronics.
SEMATECH’s Advanced Technology Development Facility (ATDF) R&D foundry subsidiary is merging with the Silicon Valley Technology Center to expand their capaabilities as an alternative to dedicated R&D fabs and shared development/production operations. Together SVTC and ATDF boast >200 customers worldwide, offering access to advanced process tools and capabilities (200mm/300mm production-grade equipment). ATDF is one of three SEMATECH subsidiaries still based in Austin, TX (with ISMI and AMRC) since the group decided to relocate its HQ and advanced technology efforts to Albany, NY.
Cypress Semiconductor says it will “exit” its Fab 2 (150mm/0.35µm) in Round Rock, TX, by late 2008, transitioning production work to its 200mm Fab 4 in Bloomington, MN, where its newer products are being designed, and to external foundry partners.
Rudolph Technologies has acquired the semiconductor business assets of Applied Precision, a provider of wafer probe card metrology systems and wafer probe process management technologies. The business will be re-formed under a new “probe card test and analysis” division within Rudolph.
Verigy, the former semiconductor automated test equipment (ATE) business of Agilent Technologies, has agreed to acquire privately held Inovys, which develops design, failure analysis, and yield software, to better target “the crossroads of design, manufacturing and yield metrology,” according to the firms.
IBM and JSR Micro say they will work together to explore new technologies for emerging semiconductor materials and processes, targeting next-generation lithography as well as self-assembly applications. Work will be done at IBM’s Almaden Research Center in San Jose, CA.
Fab construction firm M+W Zander says it has received a $400M contract to design and build an advanced semiconductor fab in Dalian, China, with around 20,000 sq. m of cleanroom space. Though the customer was undisclosed, this northeast coastal city is where Intel is establishing its proposed $2.5B Fab 68, and the groundbreaking and construction/opening dates are similar.
SMIC says its Fab 8 300mm fab in Shanghai, China, has commenced production, following equipment move-in in May and pilot production starting in July. The chipmaker’s existing capacities include three 200mm lines in its Shanghai fab, plus two 300mm lines in its Beijing fab, a 200mm fab in Tianjin, and an assembly/testing facility in Chengdu. The foundry also is currently building another 300mm fab in Wuhan.
Hitachi Chemical plans to boost its production capacity for CMP slurry by 50% to 15,000 tons/year by June through a projected ¥3.5B (US $31.8M) expansion at Yamakazi Works in Ibaraki Prefecture, Japan, deciding there is sufficient demand in the semiconductor industry (particularly in flash memory) to warrant its second expansion in a year, according to the Nikkei Business Daily. Sales are expected to double to ¥25B in the next five years.
Taiwan’s Sino-American Silicon Products has agreed to buy TI spinoff GlobiTech for $45M to extend and expand its process capabilities from ingot growing, slicing, grinding, and polishing into epitaxial deposition. Globitech also opens direct access to IDM customers including TI and X-Fab (for 200mm barrier layer epi), and On Semi, IRC, Vishay, FSC, Rohm, X-Fab, and others (150mm epi wafers).
ShinMaywa Industries has developed a method for sputtering copper thin films onto semiconductor substrates that wastes virtually none of the starting material, according to the Nikkei Business Daily. The new method uses magnets to narrow the plasma to a horizontal layer in the middle of the vacuum chamber. Applying a voltage to the copper target attracts the ions upward, striking the target and expelling copper atoms, which are ionized as they pass downward through the plasma to accumulate as a film on the chip substrate. The process can accommodate 300mm wafers by adjusting the plasma size with the magnets, the paper notes. Sales of devices based on the technology are planned for late 2009.
Samsung Electronics and Toshiba have agreed to cross-license their respective OneNAND and LBA-NAND NAND flash memory technologies to spur overall growth in the burgeoning market for “fusion” flash technologies. First products are expected sometime this year. Samsung thinks the market for “fusion” memory chips will surge to $5B in sales by 2010, making up 20% of the global NAND market, up from just $800M/4% in 2008.
Nippon Polypenco, a subsidiary of Mitsubishi Plastics, is shipping samples of a durable material for retaining rings used in the CMP process of semiconductor manufacturing, notes the Nikkei Business Daily. Developed by Polypenco’s 45% stakeholder Quadrant Group (Switzerland), the wear-resistant formulation of polyamide-imide lasts 20× longer than conventional CMP retaining ring materials, and is highly resistant to CMP chemicals used to planarize oxide and wiring layers on wafers, the paper notes.
Four years after spinning off its original nonmemory business (now MagnaChip Semiconductor), Hynix has agreed to manufacture and sell image sensors for SiliconFile Technologies, and also is taking an undisclosed ownership stake in the fellow Korean firm. Mass production is planned for 4Q08.
An appeal conducted by the World Trade Organization (WTO) has reiterated a July ruling that Japan’s 27.2% tariffs levied against Korean DRAM chips (i.e., Hynix) are illegal. But other findings from the earlier ruling against Japan were reversed, including that Japan’s methods to calculate the benefits conferred on Hynix were, in fact, allowed under Japan’s national legislation.
NXP says it has sold off equipment from its participation in the Crolles2 partnership, mainly used for R&D and pilot manufacturing, to an undisclosed buyer for an undisclosed price. Ownership will be transferred in two stages over the next six months.
X-Fab Silicon Foundries has agreed to license its 0.6µm process technology to Brazil’s CEITEC (Excellence Center for Advanced Electronic Technology), for use in CMOS semiconductor manufacturing in the country’s 150mm prototype frontend wafer fab, slated to open in 3Q08. Small-volume manufacturing and prototyping will take place at CEITEC’s fab in Porto Alegre, Brazil, with larger volumes manufactured at X-Fab’s facilities in Germany and Texas.
STMicroelectronics says it will acquire Genesis Microchip for ~$336M to widen its presence as a provider of system-on-chip (SoC) technologies to the $1.5B digital TV space. Essentially, the deal combines ST’s compression/decompression technologies and frontend processing technologies in digital TV, with Genesis’ backend image and video processing and digital interconnect capabilities.